European Commission makes Apple's commitments legally binding under EU antitrust rules

ISTANBUL

The European Commission announced Thursday that it has made Apple's commitments on contactless payments legally binding under EU antitrust rules.

The commitments address the European Commission's competition concerns relating to Apple's refusal to grant rivals access to a standard technology used for contactless payments with iPhones in stores, also known as Near-Field-Communication (NFC) or tap and go.

"These commitments address our preliminary concerns that Apple may have illegally restricted competition for mobile wallets on iPhones," EU Commissioner for Competition Margrethe Vestager said in her remarks.

"Apple has built a closed ecosystem around its devices and their operating systems. And within this ecosystem, there are multiple markets for services. Among those services, are mobile payment apps - so-called ‘mobile wallets.' Mobile wallets allow for payments with a mobile device, in shops and online. They also integrate other services, like loyalty cards, contactless tickets for events, boarding pass or digital identity credentials," she explained.

Vestager said the EU's preliminary finding in 2022 was that Apple abused its dominant position by restricting access to the technology needed to make payments by iPhones.

"NFC technology was not developed by Apple. It is a standardised technology," she said, adding that the investigation led to three preliminary conclusions.

"First, Apple holds a significant position in the market for smart mobile devices. Second, Apple is dominant in the market for NFC functionalities and for mobile wallets for iPhones. Third, Apple refused to give access to the NFC technology on the iPhone to rival wallet developers. Instead, Apple reserved the use of the NFC technology on the iPhone to its own mobile wallet solution," she said.

Vestager said Apple's behavior prevented developers from bringing new and competing mobile wallets to iPhone users, and Apple unfairly shielded its own mobile wallet from competition by excluding others.

The commissioner said the US-based global tech firm's commitments end the EU's Apple Pay investigation.

"Thanks to these commitments, iPhone users will be able to use their preferred mobile wallet for payments in stores. They will be able to do so while enjoying all the iPhone's functionalities, including tap-and-go, Double-Click and FaceID. Finally, the commitments will apply in parallel to Apple's obligations under other regulations," she added.

Apple's commitments include allowing third-party wallet providers access to the NFC input on iOS devices free of charge, without having to use Apple Pay or Apple Wallet, and to apply a fair, objective, transparent and non-discriminatory procedure and eligibility criteria to grant NFC access to third-party mobile wallet app developers.

Apple also agreed to establish a monitoring mechanism and separate dispute settlement system to allow for independent review of Apple's decisions restricting access.

The commitments apply all third-party mobile app developers established in the European Economic Area (EEA) and to all iOS users with an Apple ID registered in the EEA, also while traveling temporarily outside the EEA.